No reprieve yet for the ailing pound; continues to slide further against the euro

The pound slid for the third consecutive day against the single currency, losing 0.6% following a fall in industrial output, to close at 1.0812.

  • Sterling received an early boost yesterday morning as a Halifax survey revealed a further rise in UK house prices of 1.6% in September, buoying hopes of a strengthening economy.
  • However, such hopes were soon dashed after data revealed an unexpected fall in UK manufacturing output, which raised doubts over recovery prospects.
  • British manufacturing fell 1.9% on the month in August, its steepest fall since January, which compares to a downwardly revised rise of 0.7% in July, and fell some way short of analysts’ predictions of a 0.4% increase.
  • Importantly the data has also raised concerns that the UK may not have shown positive growth figures in the third quarter. The British economy is predicted to have exited recession, though yesterday’s figures could have dampened these expectations.
  • Investors have continued to sell the pound in trading this morning, with downward pressure likely to remain strong ahead of tomorrow’s rate statement.